April is National Financial Literacy Month. To mark the occasion, MarketWatch will publish a series of “Financial Fitness” articles to help readers improve their fiscal health, and offer advice on how to save, invest and spend their money wisely. Read more here.I am 74 years old and I take great pride in my FICO score. My late husband always instilled in me that your credit score is your best friend. I can walk into a car dealership with an 850 score and walk out with a new car.
I don’t think it is anyone’s business what my credit-card charges are each month, as long as I pay them off when due. These charges should have no impact on my FICO score. Am I being unreasonable in thinking this is none of Experian’s business?Credit scores are calculated to assess risk, and unfortunately for you, they are one-size-fits-all.
People who spend up to or close to their limit often, though not always, are struggling to pay for groceries, rent, school and all the other day-to-day expenses that prevent people from saving for that dream home or building an emergency fund. Inflation is easing, but the prices of some food items are up by as much as 36% year over year, and wage growth has failed to catch up with runaway inflation over the past several months.
Experian calculates your credit score based on a number of factors, which are all weighted differently. A score between 740 and 799 is considered “very good,” while a score between 800 and 850 is “exceptional.” If you have a better credit score, you are more likely to get approved for a loan and receive a favorable interest rate. If you are not taking out a loan anytime soon, the only thing that will be hurt is your pride.